No right to extension of franchise agreement – July 6, 2020 – mr. AW Dolphin
May a franchisor refuse to renew the franchise agreement
if the franchisee does not agree to amended terms and conditions of a
new franchise agreement to be concluded? The District Court of Limburg ruled in
a judgment in summary proceedings of 29 May 2020, ECLI:NL:RBLIM:2020:3860, which in
the case presented, the franchisor was allowed to part with the
franchisee.
The franchisee took the position that the franchisor
acts unlawfully or misuses its authority and
dominant position, by imposing unreasonable conditions for renewal
and by refusing to further negotiate renewal on a reasonable basis
terms or give them more time to sell. If the
franchisee would be forced to cease operation, there would be
enormous damage.
The franchisor had always taken the initiative to change the existing
franchise agreements. She pointed out that
request for extension had to be made no later than six months before its expiry
be submitted and how it should be done. Franchisee has it
never requested such an extension on its own initiative and in a timely manner.
The franchisee had changed positions over time.
Initially they did not want to extend, then they did, but not on
conditions according to the new agreement, then they wanted the
selling branches.
The franchisee is ordered to terminate the use of
the franchise formula under penalty of a penalty.
It strongly depends on the situation whether and how
franchise agreement is legally terminated and how the
negotiations have to be qualified, who does this (on each occasion).
takes the initiative and what the position of the parties is.
mr. AW Dolphijn – franchise lawyer
Ludwig & Van Dam Franchise attorneys, franchise legal advice. Want
you respond? Go to dolphijn@ludwigvandam.nl
Other messages
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The phenomenon of hirer's liability means that a third party can be held liable for the debts of another under certain conditions.
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The Real Intentions of the Parties to a Franchise Agreement – Mr. C. Damen – dated November 23, 2020
What really was the idea of the parties when they concluded a franchise agreement?
Circumventing the prohibition of competition in the franchise agreement – mr. AW Dolphijn – dated November 10, 2020
A non-competition clause in a franchise agreement is often experienced as objectionable by franchisees, especially if the non-competition clause also applies after the franchise agreement has expired.
Article Franchise+ – “How do I get rid of my debts: Also for franchisees and franchisors” – mr. AW Dolphijn – dated October 20, 2020
A reorganization may also be necessary for franchisees and franchisors who are in financial difficulties in order to continue to exist.
Article De Nationale Franchise Gids: “Reinvestment obligation for franchisees has limits” – dated October 13, 2020 – mr. RCWL Albers
In practice, it often happens that franchisors choose to renew their franchise formula and the appropriate image